Just number 4 please. Thankyou Consider an equation to explain salaries of CEOS in terms of annual firm sales, return on equity(roe, in percentage points, so 0-100), and return on the firm's stock (ros, in percentage points,so 0-100)log(salary)Bo + Bilog(sales) + Baroe + B3ros + u.1. In terms of the model parameters, state the null hypothesis that, after controlling for salesand ros, roe has no effect on CEO salary. State the alternative that return on equity affectsCEO salary.2. Using relevant data, the following equation was obtained by OLS:log(salary) =4.32 + .280log(sales) + .0174roe + .00024ros(.32) (.035)(.0041)(.00010)n = 209 R2 = .283By what percentage is salary predicted to increase if roe increases by 10 percentage points?Is the effect of roe on CEO salary economically meaningful?3. Test the null hypothesis that roe has no effect on salary against the alternative that roehas an effect. Carry out the test at a 5% significance level.4. Would you include roe in a final model explaining CEO compensation in terms of firmperformance? Explain.5. Construct a 95% confidence interval for B3. Do you reject the null hypothesis that ros hasno effect on CEO salary at the 5% significance level?

4. From the part 3, Decision Rule: If P-value ≤ α, then reject the null hypothesis. Conclusion:…

Consider an equation to explain salaries of CEOS in terms of annual firm sales, return on equity (roe, in percetage points, so 0-100), and return on the firm's stock (ros, in percentage points, so 0-100) log(salary) = Bo + Bilog(sales) + B2roe + Bzros + u. 1. In terms of the model parameters, state the null hypothesis that, after controlling for sales and ros, roe has no effect on CEO salary. State the alternative that return on equity affects CEO salary. 2. Using relevant data, the following equation was obtained by OLS: log(salary) =4.32 + .280log(sales) + .0174roe + .00024ros (.32) (.035) (.0041) (.00010)

Consider an equation to explain salaries of CEOS in terms of annual firm sales, return on equity (roe, in percetage points, so 0-100), and return on the firm's stock (ros, in percentage points, so 0-100) log(salary) = Bo + Bilog(sales) + B2roe + Bzros + u. 1. In terms of the model parameters, state the null hypothesis that, after controlling for sales and ros, roe has no effect on CEO salary. State the alternative that return on equity affects CEO salary. 2. Using relevant data, the following equation was obtained by OLS: log(salary) =4.32 + .280log(sales) + .0174roe + .00024ros (.32) (.035) (.0041) (.00010)

Linear Algebra: A Modern Introduction

4th Edition

ISBN:9781285463247

Author:David Poole

Publisher:David Poole

Chapter4: Eigenvalues And Eigenvectors

Section4.6: Applications And The Perron-frobenius Theorem

Problem 70EQ

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